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California Commercial Code Section 9620

Legal Research Home > California Laws > Commercial Code > California Commercial Code Section 9620

9620.  (a) Except as otherwise provided in subdivision (g), a
secured party may accept collateral in full or partial satisfaction
of the obligation it secures only if all of the following conditions
are satisfied:
   (1) The debtor consents to the acceptance under subdivision (c).
   (2) The secured party does not receive, within the time set forth
in subdivision (d), a notification of objection to the proposal
authenticated by either of the following:
   (A) A person to which the secured party was required to send a
proposal under Section 9621.
   (B) Any other person, other than the debtor, holding an interest
in the collateral subordinate to the security interest that is the
subject of the proposal.
   (3) If the collateral is consumer goods, the collateral is not in
the possession of the debtor when the debtor consents to the
acceptance.
   (4) Subdivision (e) does not require the secured party to dispose
of the collateral or the debtor waives the requirement pursuant to
Section 9624.
   (b) A purported or apparent acceptance of collateral under this
section is ineffective unless both of the following conditions are
satisfied:
   (1) The secured party consents to the acceptance in an
authenticated record or sends a proposal to the debtor.
   (2) The conditions of subdivision (a) are met.
   (c) For purposes of this section both of the following rules
apply:
   (1) A debtor consents to an acceptance of collateral in partial
satisfaction of the obligation it secures only if the debtor agrees
to the terms of the acceptance in a record authenticated after
default.
   (2) A debtor consents to an acceptance of collateral in full
satisfaction of the obligation it secures only if the debtor agrees
to the terms of the acceptance in a record authenticated after
default or the secured party does all of the following:
   (A) Sends to the debtor after default a proposal that is
unconditional or subject only to a condition that collateral not in
the possession of the secured party be preserved or maintained.
   (B) In the proposal, proposes to accept collateral in full
satisfaction of the obligation it secures.
   (C) Does not receive a notification of objection authenticated by
the debtor within 20 days after the proposal is sent.
   (d) To be effective under paragraph (2) of subdivision (a), a
notification of objection must be received by the secured party as
follows:
   (1) In the case of a person to which the proposal was sent
pursuant to Section 9621, within 20 days after notification was sent
to that person.
   (2) In other cases, in accordance with either of the following:
   (A) Within 20 days after the last notification was sent pursuant
to Section 9621.
   (B) If a notification was not sent, before the debtor consents to
the acceptance under subdivision (c).
   (e) A secured party that has taken possession of collateral shall
dispose of the collateral pursuant to Section 9610 within the time
specified in subdivision (f) if either of the following conditions
has been satisfied:
   (1) Sixty percent of the cash price has been paid in the case of a
purchase money security interest in consumer goods.
   (2) Sixty percent of the principal amount of the obligation
secured has been paid in the case of a nonpurchase money security
interest in consumer goods.
   (f) To comply with subdivision (e), the secured party shall
dispose of the collateral within either of the following time
periods:
   (1) Within 90 days after taking possession.
   (2) Within any longer period to which the debtor and all secondary
obligors have agreed in an agreement to that effect entered into and
authenticated after default.
   (g) In a consumer transaction, a secured party may not accept
collateral in partial satisfaction of the obligation it secures.

Last modified: February 22, 2013